Recent Developments

Weichai Power and KION Group to form long-term Strategic Partnership

On 31 August 2012, Weichai Power Co., Ltd. and KION GROUP GmbH announced that Weichai Power intends to make a capital investment into KION Group and both companies intend to form a strategic partnership. Weichai Power is a leading Chinese automotive and equipment manufacturing group and part of the Shandong Heavy Industry Group. The core of the strategic partnership is a close cooperation in the field of material handling and hydraulic drive technology.

Under the terms of the agreement, Weichai Power plans to invest a total of €738 million: €467 million to acquire a 25% stake in the KION Group via a capital increase and €271 million for a 70% majority stake in KION Group’s hydraulics business. In the future, the hydraulics business will be operated and managed as an independent company named Linde Hydraulics, with KION retaining a strategic stake in the company. Linde's hydraulics products will continue to be branded under the Linde Hydraulics trademark. Partnering with Weichai Power, Linde Hydraulics intends to expand its footprint, in particular in the R&D area, which will allow a better access to the Chinese market and the growing Asian region, overall. With complementary products and technologies from Weichai Power and subject to the completion of the transaction, Linde Hydraulics intends to take full advantage of untapped market potential.

The proceeds from the transactions are to be used to further strengthen KION’s capital structure. Affiliates of KKR and Goldman Sachs Capital Partners confirmed their intention to retain their respective existing investments in the KION Group and are not to receive any proceeds from this transaction. Weichai Power is committed to ensuring the stability of employment and production sites, as well as continuity in the management of Linde Hydraulics. Weichai Power has also emphasized that it wants to honour all existing collective labour agreements, bargaining agreements and co-determination of Linde Hydraulics.

In the event of a potential future IPO of KION Group, Weichai Power would have the option to increase its stake in the KION Group to 30% as well as the right to further increase its stake in Linde Hydraulics.

The transaction is expected to close during the fourth quarter of 2012. It is subject to customary regulatory approvals.

New Plant in South America started Production

On 1 September 2012, KION South America began its production in Indaiatuba/São Paulo. In the newly established plant, trucks with combustion engines as well as warehousing trucks under the brand names Linde and STILL are produced for the Brazilian and the entire South American market. After completion of the ramp-up, 180 people will be employed on the site. The production of warehousing systems in Rio de Janeiro was discontinued at the end of October.

Expansion of Activities in System Technology

As part of a comprehensive investment programme at the facilities of KION Warehouse Systems in Reutlingen, Germany, KION Group inaugurated a new training centre and showroom for very narrow aisle trucks. The newly built premises are to support the international sales and marketing activities of Linde and STILL.

Thomas Toepfer new CFO as of 1 September 2012

Harald Pinger handed over his position as CFO of KION Group to Thomas Toepfer on 1 September 2012. Mr. Toepfer joined KION Group from STILL GmbH in Hamburg, where he had acted as a member of the managing board for Finance and as Labour Relations Director. Prior to joining STILL, he had held various management positions at Karstadt, Arcandor and Hapag-Lloyd and worked as a consultant for McKinsey.

Full acquisition of Voltas Material Handling

On 2 November 2012, KION Group acquired the remaining 34% in Voltas Material Handling Pvt. Ltd. from Voltas Limited and is now the sole owner of the company. KION Group and Voltas Limited had jointly founded the Indian company in May 2011. The full acquisition of Voltas Material Handling is another milestone in implementing the successful growth strategy of the KION Group. It lays the basis to fully exploit the attractive growth potential in India. In order to service the populous Indian market, Voltas Material Handling operates a network of 14 sales offices and 35 dealers.

to pagetop